The most basic elements of a story are setting, characters, plot, conflict and theme. Recognizing what each of these elements adds to the story helps the reader understand the structure and meaning of a short story. Understanding how these elements work together also gives the reader an appreciation for the purpose of the short story.
The setting is the time and the place in which a short story takes place. The setting puts boundaries and expectations in place for the reader. For example, a short story that takes place in a school in early September gives the reader a certain expectation of what might happen within the traditional school year. Placing the story in a school in a different time -- late July -- might change the reader's expectation for what the story might bring about. The setting creates a foundation for the other elements of the story.
Each short story needs a cast of characters to move the plot along. Characters are actors within the narrative. They are the heart of the story and are part of the problem and the resolution of the plot. Characters are also the main vehicle through which a reader identifies with a short story. Authors help the reader understand the character by relating how they act, their physical appearance, their speech and interactions with other characters, how others see them and other simple descriptions. For example, Margaret Mitchell opens "Gone with the Wind" by introducing the main female character, "Scarlet O'Hara was not beautiful." Developing characters over the course of the story makes them seem more realistic, which in turn can keep the reader interested in the story.
The plot is the events that happen within a story. In a successful short story, a plot should build suspense, becoming more exciting as the story moves through the events until it reaches the climax, or most dramatic part of the story. Sometimes a story may end with the climax, but often writers will include a section to round out their narrative, tying up the lose ends of the plot to make the story a complete whole.
The conflict is the problem the characters encounter within the plot of the story. This problem adds drama to the story and is an important part of story telling, because without a conflict, a story lacks excitement. A conflict is usually introduced near the beginning of the story and continues to build until it is finally dealt with in the climax. The problem may be complex and may need to be fully resolved after the climax.
A theme is a main idea of a story or a lesson the author wants the reader to learn. The longer the story, the more themes it may have; however, short stories may also contain a number of themes. They may be major topics such as love, family, sacrifice or isolation, or they may also be the moral of the story. Themes can be implied or they can be a central belief clearly expressed by the author about one or more of life's issues.